Can I still take a carryover capital loss from closing my business if I have not taken the loss for the last two years?

by Paul K. Rudoy, CPA | Dec 03, 2018

I am on Social Security, and this year my wife is also on Social Security. This puts us over the limit for the Affordable Care Act. I have a carryover loss (capital loss) from closing my business. I have not taken the loss for the last two years. Can I now still take the loss for this year’s taxes? My only income is Social Security.

Capital losses carry over for life. The net limit per year that you can use is $3,000 for federal purposes, though. Pennsylvania does not permit capital loss carryovers.  

For example, if you have a capital loss carryover of $10,000 and you have current year gains of $5,000, you will show a $3,000 loss on your tax return. If you have the same capital loss carryover and no gains this year, you would again show a $3,000 loss on your tax return. 

For more resources, check out PICPA’s Money & Life Tips, Ask a CPA, or CPA Locator.

Answered by: Paul K. Rudoy, CPA, PFS, is managing partner of H2R CPA in Pittsburgh, Pa.

The responses are based on the limited information provided by the questioner and apply the laws and regulations at the time of posting. Other options could arise as rules and regulations may change over time, including but not limited to the passage of the Tax Cuts and Jobs Act of 2017. They are intended to provide general information, not specific accounting or tax advice; they are not intended or written to be used and cannot be used for the purpose of avoiding or evading taxes or penalties under the IRS code or regulations. Views expressed do not imply an opinion of the PICPA, its officers, directors, employees, or members.
Financial FAQs

Search the most frequently asked finance and accounting questions and read the responses from PICPA members. Always consult a CPA before taking action.